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How Asia Works: Success and Failure in the World's Most Dynamic Region

Joe Studwell

4.27 · Rating details · 2,947 ratings · 304 reviews

In the 1980s and 1990s many in the West came to believe in the myth of an East-Asian economic miracle. Japan was going to dominate, then China. Countries were called “tigers” or “mini-dragons,” and were seen as not just development prodigies, but as a unified bloc, culturally and economically similar, and inexorably on the rise.

Joe Studwell has spent two decades as a repor ...more

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Hardcover, 320 pages

Published June 25th 2013 by Grove Press (first published March 1st 2013)

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Aug 31, 2014 Matthew rated it it was amazing

Shelves: history, economics, business-history, china, south-east-asia

This was excellent, very well organized and concisely argued. Basic point I think is that nations need to take control of their own economic and industrial narratives. The first part was eye opening for me, focusing on agricultural policy and land reform - effectively arguing that the first stage of development should be redistribution to encourage high density labor intensive farming as a means to employ workers and increase acreage yields, which improves the current account and creates a domes This was excellent, very well organized and concisely argued. Basic point I think is that nations need to take control of their own economic and industrial narratives. The first part was eye opening for me, focusing on agricultural policy and land reform - effectively arguing that the first stage of development should be redistribution to encourage high density labor intensive farming as a means to employ workers and increase acreage yields, which improves the current account and creates a domestic market. Though at a later stage he does say that as incomes rise, a move to large scale commercial farming is optimal for improving productivity, otherwise you get stuck ala Japan. Second part is on industrial policy which is more typically covered, key points here are I think needing to have infant industry policies, but subjecting them to export discipline and culling the losers. What's interesting here is the comp between Japan, Korea, Taiwan and to a lesser extent China. Third part is on marshalling finance, and I think this is a fascinating point -- that if industrial policy is in the right direction, financial policy is a secondary factor for devt (case in point Korea), and vice versa (case in point Malaysia/Thailand - relatively prudent financial policy, weak industrial policy; if you have weak everything you are just screwed ala Philippines). Last chapter is on China in light of the foregoing historical analysis.

It all strikes me as valid and making a lot of sense. There is generally a strong appreciation for historical and country specific context, and a solid bibliography for further reading. It is also generally an argument for more emphasis on the historical, rather than formal/mathematical, approach in development economics. What I hoped for more of were perhaps his thoughts on the funk that the East Asian model is now in - Japan in deflation, Korea struggling to empower its SMEs and disempower the chaebols, and Taiwan hollowed out by money going to China - and China facing the limits of its own export and investment growth model. In that sense his story is backward looking - useful as a framework for thinking about how SEA, perhaps, which is relatively behind the curve, could develop, but less useful for thinking about how North Asia will look in 10-20 years. ...more

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Aug 04, 2018 Bouke rated it it was amazing

Shelves: asia, gift

Really interesting book! This might be the only book I’ve ever read on macroeconomics, but it’s very well written and reads easily.

The book investigated and expounds the successful and not so successful economies of Eastern Asia, comparing why certain ones (Taiwan, S Korea, Japan) succeeded, while others (Philippines, Indonesia, Thailand) never reached the same level of success. The author explains that a lot of the policies that made these and other industrialized countries successful are cont Really interesting book! This might be the only book I’ve ever read on macroeconomics, but it’s very well written and reads easily.

The book investigated and expounds the successful and not so successful economies of Eastern Asia, comparing why certain ones (Taiwan, S Korea, Japan) succeeded, while others (Philippines, Indonesia, Thailand) never reached the same level of success. The author explains that a lot of the policies that made these and other industrialized countries successful are contrary to those spouted by the world bank, IMF, and the US.
According to the author it comes down to three policies by the developing countries’ governments:

1. Agricultural development. When a country is underdeveloped and labor is cheap, it should redistribute farmland to small household farms, and make sure that this is done in a sound way such that the land can’t just be accumulated under one landlord again. The reason is that ‘gardening’-style farming as done on such farms, while labor-intensive is much more productive per hectare than large-scale mechanized farming. This will lead to a surplus in yields, which will lead to profits for the families, which they can then re-invest in their farms or use to improve their own living conditions. This policy should also be supported with subsidized fertilizer, education, etc. whatever support the government can give to improve the yield of small farmers. The problem in the Philippines is that, while they tried to do land reform, in the end the big families just regained their land through backdoor policies, and to this day are farming them like plantations, which are profitable but don’t provide the biggest amount of welfare for the nation.
2. Industrial policy. The country should nurture an infant manufacturing sector through protectionism and export discipline. The author points out that basically every industrialized country did so through protectionism, including Germany, USA, and the UK. The developing country should build up their own expertise, for example by doing technology transfers with foreign firms (while maintaining control) until they can innovate on their own. This should be stimulated by the government. An example from the book, is that during the Korean junta they rounded up all the business leaders and forced them to sign a statement that they agreed to listen to the junta, otherwise all of their possessions would be taken from them. They then coerced them into starting manufacturing businesses like cables etc. The other key factor is that the manufacturing businesses should be forced to compete on a global level through ‘export discipline’, which is policy that incentives businesses to export their products, for example by guaranteeing loans based on purchase orders from abroad (like Korea did).
3. Keep a tight leash on the financial system. The hire part is that the government should rightly control the finance system and ensure it works to their interests, instead of being captured by profiteers. An example was that in the Philippines, where the banks were privatized, the big family businesses all had their own banks which would loan money to the family business, which they would just not pay back, leading to the government picking up the cheque. In Malaysia they liberalized the financial system and IPOd companies prematurely, leading to huge stock market bubbles on unproductive companies. Only after industrialization should the banking sector be liberalized bit by bit.

The last chapter is on China, and talks about how all these things are also playing there, but on a much larger scale and with the twist that many of the large companies are state-owned.

In conclusion, very good and clear book. I learned a lot. ...more

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Oct 31, 2020 Hadrian rated it really liked it

Shelves: economics-finance-business, nonfiction, china

Studwell's How Asia Works is a forceful challenge to a previous Washington Consensus of international development. His models for success are the German Historical School and the United States in the 19th century, and more recently South Korea, Japan, Taiwan, and China -- and by contrast, he sees more failure in Malaysia, the Philippines, Thailand, and Indonesia.

Studwell's model is easy to summarize. It is in three steps - First, agricultural reforms: land redistribution and labor-intensive far Studwell's How Asia Works is a forceful challenge to a previous Washington Consensus of international development. His models for success are the German Historical School and the United States in the 19th century, and more recently South Korea, Japan, Taiwan, and China -- and by contrast, he sees more failure in Malaysia, the Philippines, Thailand, and Indonesia.

Studwell's model is easy to summarize. It is in three steps - First, agricultural reforms: land redistribution and labor-intensive farming, to maximize employment and build up a surplus for export - this works when the cost of labor is low. Second, manufacturing, built upon an active industrial policy and some tariff protection. The point of industrial policy would not be to pick winners, Studwell emphasizes, but to build up firms that can compete on the global markets and maximize gross, not net exports. Domestic firms would either adapt or innovate enough to compete with foreign competitors, or they would be cut off from funding. That leads to the third part of the program - finance. The banks would need to support infant industries but also need to instill discipline and develop firms and industries that can hold their own.

Intuitively this makes sense - while I don't know enough about the southeast Asian economies to really comment on how Studwell treats them, my only real caveat is the standard one given to most cases in developmental economics. Models are only models, and there are differences in legal and institutional backgrounds across countries. For example, Park Chung-Hee, an authoritarian, could and sometimes did, imprison executives that disagreed with him. While many rulers covet that power, not all of them have it. Not everybody starts off with a Korea, or a China, for that matter.

Going back on it, this book forms an interesting complement with the work of Yuen Yuen Ang - she asks the question of what reforms should come first - good markets, or good institutions? The answer is both, but allow people to improvise and incentivize them to do so. While the methodology of academic models is to focus on first causes and a clear split between different options, economies tend to defy predictions of them.

To conclude - Studwell has an interesting story to tell about the "developmental state", how developing countries can approach issues in different ways from developed ones, and he has the facts and citations to make his case. To read, and to take seriously. ...more

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Feb 07, 2015 Dyan Canlas rated it it was amazing

Highly stimulating. Very relevant with clear examples given and direct to the point. Influential read as I am part of an East Asian country, and seeing how we and neighboring countries operate is a bit disappointing and encouraging. There is room for improvement in the economies of South East nations, lots of it, but it will come from the people.

I barely knew economics concepts, but here I am trying to google the main points I take from the book. Very comprehensive and worthy read.

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Jun 02, 2020 Ravi Srikant rated it it was amazing

I wish Indian policymakers read this book before designing any of their policies. The book summarises the economic policies implemented by Japan, Korea and Taiwan that lead to their stupendous growth and earned them the moniker "Asian Tigers". There is a comparison with Indonesia, Malaysia, Phillipines and Thailand as well on what not to do. The 3 key policies highlighted are land redistribution to support small scale independent agriculture, export oriented manufacturing policies with domestic ...more

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Jul 29, 2019 Elena Zhukova rated it it was amazing

A must-read for anyone interested in Asia or in a more general question of economic development. The author is a bit repetitive with the core principles he has identified, but now I'm sure I'll remember them ...more

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Sep 19, 2018 Andrew rated it really liked it · review of another edition

Pretty, pretty, pretty, pretty good

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Dec 26, 2018 Oliver Kim rated it it was amazing

Shelves: development

The rise of the east Asian economies, and the lifting of their six hundred million out of grinding poverty, is the central fact of the past hundred years. In scope, nothing else comes close.

In “How Asia Works”, Joe Studwell tells us how this seeming miracle was made possible: a three-step prescription of land reform, export-focused industrial policy, and financial repression. Japan, South Korea, Taiwan, and (most recently) mainland China have grown rich by following this formula; by ignoring it, The rise of the east Asian economies, and the lifting of their six hundred million out of grinding poverty, is the central fact of the past hundred years. In scope, nothing else comes close.

In “How Asia Works”, Joe Studwell tells us how this seeming miracle was made possible: a three-step prescription of land reform, export-focused industrial policy, and financial repression. Japan, South Korea, Taiwan, and (most recently) mainland China have grown rich by following this formula; by ignoring it, Malaysia, Thailand, Indonesia, and the Philippines have fallen behind. Earlier reviews, largely glowing, have already scrutinized the Studwell Plan’s three parts, so I won’t go into them here. But, as a grad student in an economics PhD program, I’d like to recommend this book on two further counts.

The first is stylistic. Studwell doesn’t equivocate. “No ruling elite in Asia”, he declares, “has come up with as many ways to avoid implementing genuine land reform as the Filipino one.” In Studwell’s idiom, offshore financial centers like Hong Kong and Singapore are “parasitic”; Malaysia, which halfheartedly tried to industrialize, is likened to a student “who went to school and college for twenty years but failed to pay sufficient attention”. Coming from academia, this kind of bluntness is refreshing—none of this “on the other hand, marginally significant coefficients are estimated in the third and fifth specifications” gobbledygook. Of course on many of these points Studwell is wrong. (He dismisses the success of Hong Kong and Singapore too easily, for one.) But being boldly wrong makes it easier to delineate where one disagrees.

The second point is more subtle. Most reviews note how, in his three-point plan of state-directed development, Studwell rebukes the neoclassical orthodoxy taught to almost every young macroeconomist. Special scorn is reserved for US-trained PhDs, among them the IMF and Indonesia’s “Berkeley Mafia”, whose advice to countries rich or poor, boom or bust, was to liberalize, liberalize, liberalize.

History has so thoroughly discredited this worldview that most serious experts will no longer defend it—debunking it is old ground. I found my thoughts stirred more by a second, methodological rebuke: namely, Studwell shows a deep concern for the sort of institutional details that economists are trained to leave out.

The standard neoclassical story taught in graduate macro (if taught at all) is that the east Asian economies grew out of poverty by rapidly accumulating capital, moving labor from farms to factories, and funding all of this through unusually high rates of saving. In its broadest strokes this resembles Studwell’s thesis. But for many economists, this will be the extent of their training in the subject. I distinctly remember a conversation in the graduate student lounge where, with the smug assurance of the newly converted, we discussed how neat it was that so much could be summarized with such a simple model.

Studwell dares us to dig deeper. For instance, what were the conditions in northeast Asia that freed millions of farmers to move to the factories? In neoclassical growth theory this reduces to an increase in L (labor) or H (human capital)—understanding the incentives of smallholder farmers, or the minutiae of how gardeners maximize yields per acre, was below the pay-grade of serious macroeconomists. But Studwell makes a strong case that the institutional detail of how land was parceled out (and who was doing the parceling) is what separates a country like Japan from the Philippines.

Or consider the case of manufacturing. With similar rates of investment, starting from roughly the same level of wealth, Korea has produced the Hyundai Elantra; Malaysia, the Proton Waja. The closed-economy, perfect-competition growth models featured in most textbooks have little to say on how this is possible. Studwell’s suggestion of export discipline reinforced by a government cudgel, while incomplete, is at least partway to a full answer. In both cases, historical experience cries out against against a reductive theory, shorn of political context.

Of course, (returning to the graduate student lounge) as young progressive types we economists-in-training will profess a belief in the importance of political institutions, the ubiquity of market failure, and the new mode of careful causal identification. But in our training we are given only the neoclassical growth model—most programs no longer even bother to teach economic history. Many of us will go on to positions in government or the commentariat, and will inevitably be asked how to “do a China or Japan”. I worry that, without a decent alternative, we will be tempted to fill in the gap with an easy generalization, like a writer resorting to a cliche.

In that vein, I cannot recommend this book enough to my friends pursuing economics PhDs. Graduate training, with its growth models and representative agents, provides a sturdy analytical framework for analyzing the problems of development. But, left bare, a framework is just a skeleton. What Studwell’s book reminds us, clearly and forcefully, is that our models are at best a rough approximation of a messy reality, and that there is institutional flesh to study between the equations. ...more

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Mar 08, 2021 Jacob Emrey rated it really liked it · review of another edition

Not easy but worth it

This is an academic look at the economic successes and failures in Asia. Considering the complexity of the topic this is a very concise yet informative book. I wouldn’t necessarily recommend it to someone who has a very basic understanding of economics but rather for individuals who have at least a foundation in Macro/ history and are interested in diving a little deeper into a complex world.

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Sep 09, 2018 Laurent Franckx rated it liked it

I have read this book following the positive Twitter review by Noah Smith https://twitter.com/noahpinion/status...

I am now trying to find some points to add to what Noah Smith wrote on the subject but it's not easy to think of anything.

I should admit that while, reading the book, I often had the economists' reflex of asking myself: "well, right, this may be true in practice, but does it also in theory"? It's of course easy to make fun of this attitude, but it's actually a valid question: it's no I have read this book following the positive Twitter review by Noah Smith https://twitter.com/noahpinion/status...

I am now trying to find some points to add to what Noah Smith wrote on the subject but it's not easy to think of anything.

I should admit that while, reading the book, I often had the economists' reflex of asking myself: "well, right, this may be true in practice, but does it also in theory"? It's of course easy to make fun of this attitude, but it's actually a valid question: it's not enough to describe things that worked in a very specific context, you also need to understand whether the findings can be generalised.

For instance, I think that the theoretical arguments in favour of the "infant industry" argument has more credit amongst economists than most people realise. Anyone who can 'read' an economic model knows that the 'comparative advantage' argument in favour of free trade is based on a static analysis and that it can be optimal for a country to sacrifice short term gains of free trade to obtain larger gains in the future. The key objection against the "infant industry" argument is that, given how it has been applied in practice, it has mainly created rents for domestic industries that are protected against international competition, and that these favours tend to be perpetuated at the expense of domestic consumers.

The relevant question is thus: what works and what doesn't? And why do some policies work in some countries and not in others? It is more or less generally accepted now that "import substitution" is generally a very bad idea as a road to economic development. The contribution of Joe Studwell is that he argues in favour of a very specific type of "infant industry" policies, that combines large scale public support for export oriented industries with a consistent "culling" of any company who was not up to the job. But this leaves open the question why this type of policies was possible in Japan, South Korea and Taiwan, and not in Thailand, Malaysia, Indonesia or the Philippines. What made these countries 'different'? I still don't know. If the conclusion is that it's due uniquely to the characters of individual policy makers, then of course we cannot be very hopeful about any generalisable policy recommendations.

This being said, one of the things I really liked about the book is the complete absence of any doctrinaire thinking. Studwell argues forcefully in favour of land reform, but at least partly because it was necessary to stop spreading communism. He is opposed to premature deregulation of the financial sector, but admits that the IMF's insistence on the deregulation of the financial sector in South Korea during the 1997 may he have come in timely.

Studwell's book defies any ideological classification, and that makes it really great and challenging. You don't need to agree with everything to admit that we need more thinking like this. ...more

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Mar 05, 2019 Kair Käsper rated it it was amazing

Shelves: the-world-we-live-in

I wanted to give this book 4 stars, because of the author's tendency to go into too much detail (for my liking). But I can't. This book broke a lot of what turned out to be misconceptions and it marvellously explains (in a Sapiens-kind-of-way) how countries like Japan, South Korea, China and Taiwan have become economic powerhouses while Philippines, Indonesia, Malaysia are trailing far behind, despite having roughly the same starting point. It's a well-researched and brilliantly argued blueprint I wanted to give this book 4 stars, because of the author's tendency to go into too much detail (for my liking). But I can't. This book broke a lot of what turned out to be misconceptions and it marvellously explains (in a Sapiens-kind-of-way) how countries like Japan, South Korea, China and Taiwan have become economic powerhouses while Philippines, Indonesia, Malaysia are trailing far behind, despite having roughly the same starting point. It's a well-researched and brilliantly argued blueprint for transforming a low-income country into a top performer, based on history and facts, not blackboard theories.

There were too many highlights to list them all, but here's a taste:
- turns out that I'm not so liberal as I thought. For a country to develop economically it needs to protect itself from outside exploitative forces. Trade barriers, state controlled banks, heavy (export) subsidies etc are not only beneficial, but necessary.
- wealth redistribution through land reform is extremely difficult to execute, but absolutely crucial to build up the country (reasons thoroughly explained in the book)
- export is everything, the winning formula is not to pick winners, but to kill the losers
- multinational corporations in low-income countries keep them low income as the arrangement benefits the countries leaders (and maybe even the country itself in the short term), but keeps local companies from learning and therefore competing in the long term
- China, South Korea, Japan have been good at limiting Western access and incentivising their star entrepreneurs to learn and incrementally increase exports. The results are easy to see when looking at car manufacturers and consumer electronics. Even so, most of the game takes place away from public eye, with lead roles played by investment, construction and industrial companies.

The only critique I have for the book is that it pretty much stops with industrialization and doesn't really tackle the already dominant tech scene. It almost feels like the last 1/3 of the book is missing. Still, this is probably the most fascinating book on economics I've read. ...more

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Jul 31, 2013 Aaron Arnold rated it it was amazing

Shelves: read-in-2014, history, economics

The title makes a bold claim, but overall Studwell does an excellent job of condensing, comparing, and commenting on the development paths of almost all of the major northeast and southeast Asian economies from an elevated yet rigorous level. While space prevents him from discussing some of the most unique countries - I'm thinking mostly of North Korea and Vietnam as well as Singapore and Hong Kong, though surely Laos, Cambodia, Myanmar, and Papua New Guinea have their own interesting stories - The title makes a bold claim, but overall Studwell does an excellent job of condensing, comparing, and commenting on the development paths of almost all of the major northeast and southeast Asian economies from an elevated yet rigorous level. While space prevents him from discussing some of the most unique countries - I'm thinking mostly of North Korea and Vietnam as well as Singapore and Hong Kong, though surely Laos, Cambodia, Myanmar, and Papua New Guinea have their own interesting stories - the room freed up thereby lets him pack in a remarkable amount of high-level analysis in about the remaining countries: Japan, South Korea, and Taiwan; Thailand, Malaysia, Indonesia, and the Philippines; and of course China, which appropriately gets the entire fourth section of the book all to itself. The remainder of the book is split amongst the other seven nations (or six plus whatever you want to call Taiwan), divided into three different stages of development: agriculture, manufacturing, and finance.

Successful development strategies begin with agriculture, the sector that has contained the majority of the workforce in every undeveloped country in history. Farming's relationship to political structure is complex, but most underdeveloped societies seem to be stuck a sort of feudal pattern, with a few large landowners controlling vastly disproportionate shares of each country's land and hence political system (note that this harmful pattern may have been encouraged in former first-world colonies). Since the most efficient way to get food is to have many small farmers working many small plots of land (it will come as no surprise to sustainable-food advocates that this "garden-style" method is typically more effective than US-style agribusiness), the first task of every forward-thinking leader is to break up large estates and redistribute the land to the people. Some countries like Japan managed this well, raising their food production as well as increasing economic mobility, while oligarchies in others like the Philippines made sure that redistribution never disrupted their control of local markets. While land redistribution and the instigation of widespread household farming does not by itself guarantee success, failure to bring the masses into the formal economy means both that fewer people make the jump from "starving miserably" to "just getting by" and that power remains concentrated among very few hands.

Once land redistribution has succeeded, industrialization can proceed. In Europe, the Industrial Revolution began first with the textile industry, which is a path many countries still take (e.g. Malaysia's garment industry). Light industry is well-suited for developing countries, since there will frequently be many small factories requiring large amounts of not-especially-skilled labor. Additionally, the increased number of household farmers looking to sell crops will need things like pickup trucks, motorcycles, or motorized bicycles, spurring the growth of companies like Honda who got their start by building just such vehicles. There's a persistent debate among economists: should developing countries raise tariffs and provide subsidies to infant industries, risking corruption and inefficiencies; or should they pursue neoclassical free trade policies, following the theoretically maximally efficient orthodox neoclassical model at the risk of having infant industries crushed by superior foreign competition? Studwell convincingly demonstrates that the former is the correct path, citing the arguments of Friedrich List and Alexander Hamilton among others. The common metaphor is that tariffs and subsidies are like a ladder used to climb up, to be kicked away when done, but the examples of rich countries that used mercantilist policies to get rich and then later mostly or partially deregulated (i.e., all of them) shows that early state support for industry is vital. South Korea's support for Hyundai, Daewoo, and others had many positive spillover effects for related heavy industries like shipbuilding.

However, it's important not to gloss over the failures of heavy state involvement in industry. Even in the US, development projects like railroad construction after the Civil War were notoriously corrupt, and all of the same risks of cronyism, rent-seeking, and regulatory capture are present in Asia. The most important thing for countries to do, as shown by the examples of Japan and South Korea, are to focus on exporting manufactured goods which can be traded as opposed to cultivating service industries which can't, and then promote export discipline by not allowing domestic firms to get lazy. Japanese cars were laughed at when they first hit American markets, but they quickly improved and seriously challenged the Big Three because Japan would not allow their manufacturers to rest on their laurels; Malaysia was not nearly so stringent with its auto industry, and as a consequence Proton never achieved the same reputation for quality. A common pitfall for countries is to simply ask foreign companies to set up shop with some branch plants in their country and raise their living standards that way. Trying to skip ahead in that method doesn't work for a few reasons: first, incentives or subsidies to the foreign companies are often expensive, representing an export of capital desperately needed at home; second, much less knowledge is transmitted to the local economy than if native entrepreneurs had been given the support to figure things out for themselves and create their own supply chains; third, fewer jobs are created, with those that do being generally of lower quality; fourth, interactions with the foreign companies are rife with potential for corruption.

This has implications for the third stage of development, the creation of a domestic finance industry. Studwell goes into a great amount of detail on how various countries' financial sectors either contributed to their paths of development or inhibited them, and the Asian financial crisis of course figures prominently as a warning sign to countries that were on the wrong development path. Another reason to prefer investment in manufacturing over services is that once an independent financial sector gets going, money tends to flow to lucrative but non-productive sectors like high-end real estate speculation rather than, say, new industrial infrastructure. This is especially true in the case of countries whose elites survived the process of land redistribution and the creation of a manufacturing sector, and who now maintain critical positions in agriculture, industry, and finance (thus leading to sweetheart loans, kickbacks, and all manner of related corruption). Financial crises are devastating no matter how developed your country is, but one with plenty of domestic firms is able to get back on its feet much more quickly than one with a bunch of empty factories that used to be owned by foreign companies. Countries that develop successfully engage in heavy financial repression and capital controls, which increases the savings rate and allows for the currency exchange rate to be used to favor domestic producers. This has the cost of artificially stunting consumption, as well as perennial demands from the IMF for financial deregulation and floating exchange rates, but as long as a country's leadership is not too dominated by a few families, as it was in places like the Philippines, it should be able to use the tools of modern international finance to finally compete on a level playing field with rich Western countries.

All this brings us to China, whose development path has similarities with both the richer Northeastern Asian countries and the poorer Southeastern ones, and is hence unique enough to deserve the sole focus of the final section even aside from its singularly vast scale. It's come a long way from disasters like the Great Leap Forward; China's modern rush towards development is an acknowledgment of the failures of state-lead growth, and yet even today China has immense state companies that play vital roles in its economy, alongside the countless numbers of foreign-owned companies that use its cheap labor to assemble much of the world's high technology. There's a business concept (first introduced by the CEO of Taiwan-based Acer, interestingly) called the "smile curve" - profits are highest in the early product design/R&D stage, low in the manufacturing stage, and high again in the sales stage. China's leadership is very aware of what needs to be done to get domestic businesses to climb higher and higher up the value chain and cease relying so much on its current comparative advantage in cheap labor, but frequently that's easier said than done. Studwell remarks that often Chinese businesses find it easier to compete in the business-to-business heavy-industry sectors like energy, shipbuilding, or rail compared to more consumer-focused sectors like high tech, but since China is for the most part adhering to the successful path of heavy financial repression and capital controls (though anyone who's followed the Bo Xilai story knows the vast scale of Chinese corruption), it seems that China will most likely emerge in a few decades at or near the technological frontier of the rich Western countries.

Any book that tackles such a broad subject invites criticism, but for the most part the book seems to mesh well with other books I've read. James Fallows' China Airborne had a lot to say about the development of the Chinese aviation market, which bears directly on many points raised here about the manufacturing sector and its role as a driver of acceptance of international business standards. The sections on the Asian financial crisis also seem to mesh with what I've read from other sources like Paul Krugman's The Return of Depression Economics (an earlier work of his, "The Myth of Asia's Miracle", also offers an interesting alternative perspective on Asian development). Furthermore, even though his histories of each individual country can't help but oversimplify, his general insights on pitfalls of development seem to cover the specific agonies of each individual country that for one reason or another has gotten into trouble. Overall, Studwell has done an excellent job of explaining why leaders like Park Chung-Hee, Deng Xioaping, and Meiji took their countries in such different paths than Mao Zedong, Mahathir Mohamad, and Sukarno in a brisk, well-argued volume. ...more

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Apr 06, 2021 Nathan rated it it was amazing · review of another edition

Shelves: economics, foundational, wealth, 5-star

An excellent economic study of Asia – a lot can be learned. Often, economic thought diverges in Asia compared to the West, and even from the IMF imperative of complete free market. There is more emphasis on state financing, which is a double edged sword depending on whether the capital is used effectively or not. Capital used to fund development of infrastructure, manufacturing; and analogously - land reform (to crack down on despotic land ownership) is ideal. These factors help ensure a nations ...more

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May 16, 2020 Ryan Huynh rated it it was amazing

Joe Studwell looked back to history and figured out the economic framework for developing a national economy in the most simplistic and fundamental way. I've learned so much about different economies in Asia in the past and could see the results from those previous decisions/ strategies each made lead to the current presence of each country in Asia. This book has heightened my interests in economics for its simplism and logics, I learned to understand the importance of this decision making to ou ...more

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Jun 25, 2018 Omar rated it it was amazing

Shelves: really-should-read, development

the least libertarian book

it's an _actual plan_ to go, uh, "from third world to first", and it makes sense, and it seems to work! it's politically hard, but it's not magic!

pretty much summarizes to: land reform & ｅｘｐｏｒｔｄｉｓｃｉｐｌｉｎｅ

this review elegantly reframes the book's policies: they are all about _directing toward positive externalities_ for development:
- land reform => higher productivity, larger tax & consumer base
- export discipline => making better and more advanced products, development ...more

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Jan 29, 2019 Alex O'Connor rated it really liked it · review of another edition

A very informative and readable account of how Asia got to be where it is today through the lens of agriculture, manufacturing, and finance with particular emphasis on China. I learned a great deal from this book and recommend it highly.

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Nov 02, 2020 Andrew Chapman rated it it was amazing · review of another edition

He has very persuasive arguments about what policies developing countries should adopt, based on the historical record of several Asian countries. I kept thinking about how these might apply to Latin America.

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Jan 05, 2015 Kaushik rated it really liked it

Studwell's book is a coherent, well-reasoned primer on the causes of economic growth and lack thereof in east Asia. Through careful historical analysis, the author has clearly disproved the myths propagated by experts on both sides of the left-right divide regarding the drivers of economic success. The author has clearly segregated the successes (S. Korea, Japan and Taiwan) from the middling performers (Malaysia, Thailand) and the complete failures (Indonesia and Philippines) - this distinction Studwell's book is a coherent, well-reasoned primer on the causes of economic growth and lack thereof in east Asia. Through careful historical analysis, the author has clearly disproved the myths propagated by experts on both sides of the left-right divide regarding the drivers of economic success. The author has clearly segregated the successes (S. Korea, Japan and Taiwan) from the middling performers (Malaysia, Thailand) and the complete failures (Indonesia and Philippines) - this distinction is backed by the speed with which each of these nations were able to bounce back from the Asian crisis and the drivers of the same (genuine industrial competitiveness in north-east Asia against resource wealth in Malaysia).

Studwell outlines a 3 point formula that has been applied in varying degrees across the world. Basic land reform ensures maximization of yields per area, reduced food import bills (and, in some cases, provided vital forex earnings) and created surpluses to drive broad based consumption and investment. Following this, the most successful nations nurtured and supported enterprises to acquire technical competencies while pushing exports - this ensured that local firms had time to learn but also forced them to world-class in terms of quality of output. All of this was backed by a supportive financial system that lent to projects with relatively long gestation lags while also playing a role in culling the losers. The vital steps of forcing export performance and culling losers were missed in places like India, thereby ensuring several cases (in public and private sectors) of pathetic performance and seeking refuge in rents.

While some of the measures undertaken by the likes of South Korea (such as massive financial repression and forcing export led growth) might not be entirely applicable in today's scenario, the basic lessons remain unchanged. It is the absence of thorough historical analysis and excessive faith in textbook models that led to incorrect prescriptions and needless misery in parts of Asia, Latin America and Africa. A doctrinaire free market approach has not worked anywhere in the world - support from the state has been present in varying degrees in the UK, US, Germany and Japan. The key is to ensure that the support is used to acquire world class competencies and also gradually allow full competition.

Coming to the gaps in the book, Studwell has been a bit dismissive of the role played by basic manufacturing setups (assembly shops for exports) in China, Korea, etc. While these do not provide significant learning and are based on cost arbitrage, they do generate surpluses and forex reserves to finance long term investments and technology acquisition and generate much needed employment. Also, the spread of basic education (not mentioned by the author) created a workforce that could be easily skilled and put to work in factories. Finally, the abuses in the state directed development process in S. Korea (such as related party lending) have received only a cursory mention - an analysis of this and possible safeguards would have been useful.

The best part of the book is that it makes no bones about the wrinkles in the growth story of Asia - the need to allow some supernormal profits, the role of an empowered, technocratic bureaucracy and using some rents to align private sector behaviour to developmental needs. This is a must read for anyone interested in understanding the realities of the development process.

PS: For IIMA alums, this is a follow on from Prof Morris' initial lectures on economic policy. ...more

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Apr 13, 2019 Miebara Jato rated it really liked it

The Asian countries took the world by surprise. Their miraculous rise from third world to first world economies is an inspiration. But less known is the kind of reforms and policies these nations implemented, most of which were in many ways at variance with traditional economic ideas.

In this excellent book, Studwell highlighted concisely and persuasively that what works for development (going from poor to rich) is NOT the same as what works for rich countries. He was harshly critical of the IMF The Asian countries took the world by surprise. Their miraculous rise from third world to first world economies is an inspiration. But less known is the kind of reforms and policies these nations implemented, most of which were in many ways at variance with traditional economic ideas.

In this excellent book, Studwell highlighted concisely and persuasively that what works for development (going from poor to rich) is NOT the same as what works for rich countries. He was harshly critical of the IMF and the World Bank, essentially saying market fundamental policies of these institutions are keeping countries poor.

Studwell used the successful Asian countries to depict that there are three stages for development.

The first stage is agricultural reforms. Studwell argues for a redistribution of land to encourage high-density labour intensive farming as a means to employ workers and increase acreage yields, which improves the current account and creates a domestic market. Though he warned this shouldn’t be done in perpetuity, because as incomes rise, a move to large scale commercial farming is optimal for improving productivity. But the point is, poor countries can maximize yield per acre rather than return on investment, by having poor farmers do labour-intensive gardening on small farms. This can be done along with other government supports like extension services, marketing, and infrastructure.

The second part -- and the centerpiece of the book -- is about manufacturing and exports. Studwell thinks developing countries need to force their companies to export, in order to make them more productive. In other words, having an infant industry policy, but subjecting them to what he calls “export discipline” and “culling” the losers. Export discipline basically means: (1) incentivise or even forcing companies to export; and (2) Global markets providing the "discipline" that forces these companies to raise productivity and find market niches. By Culling companies that fail in export markets either by the market (through bankruptcy) or by the government (by forced mergers).

Studwell is simply arguing that development policy should be about the government encouraging competition, rather than suppressing it. A free-market story, but not the kind that picks winners.

The third part is on financial policy. According to Studwell (and this is interesting!), so long as a country has its industrial policy right, financial policy is a secondary factor for development. To Studwell, any financial system is fine as long as it supports "export discipline". Even financial crises, he says, aren't that bad, as long as you have rapid technological progress.

I recommend this book to anyone who's interested in economics and development. The book is written in a plain language. There are not even graphs or charts ...more

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Apr 12, 2020 Ryan Tolusso rated it it was amazing

Excellent book! Studwell has a clear, persuasive and analytical writing style that is a joy to read. He presents a simple argument that can be summed up in a few sentences and slowly, carefully constructs a supporting edifice. He weaves together data and storytelling in a way that makes the argument approachable, if still somewhat technical. Studwell provides enough detail that the story, though oversimiplified at some points of the book, doesn't feel like a paper tiger in the Gladwell mould.

My ...more

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Jul 20, 2017 Ben Khoo rated it really liked it

Recipe for development success:

1. Land reform - Split land evenly. Don't let the cronies take control!
2. Manufacturing - Focus on exports, and being competitive overseas. Don't let the cronies take control!
3. Finance - A tool to accelerate industrialization, never a end in itself. Don't let the cronies take control!

Mix thoroughly. Let sit for 25 years.
Voila!

----------------
While the title is how "Asia" works (actually it should be "How Asia Worked"), the book is really about Studwell's recipe of ...more

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Jun 25, 2013 Michael Wallace rated it really liked it

I bought this book on the recommendation of the Marginal Revolution blog. I enjoyed it a good deal and the theme of agricultural reform as a precursor to the industrial revolution in NE Asia was new to me. I was more aware of the export and banking components of their development.

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Jan 02, 2021 Robert Morris rated it it was amazing

Brilliant. I feel like I learned more from this book than any I have read in years. The breadth of history and geography it covers in a very short, approachable package is very impressive. The book has insights on China, but more importantly it provides an easily digestible summary of the past half century+ of economic development in Japan, Taiwan, South Korea, Malaysia, Indonesia and the Philippines. It situates China within that framework of success and failure.

For somebody like myself, who h Brilliant. I feel like I learned more from this book than any I have read in years. The breadth of history and geography it covers in a very short, approachable package is very impressive. The book has insights on China, but more importantly it provides an easily digestible summary of the past half century+ of economic development in Japan, Taiwan, South Korea, Malaysia, Indonesia and the Philippines. It situates China within that framework of success and failure.

For somebody like myself, who had only the slightest grasp on the history of East Asia beyond Japan and China, this book was super useful. Studwell is very clear in his analysis, recommendations and judgements. Perhaps a little too clear. He sees Japan, Taiwan, South Korea, and China using the same development model successfully, and he sees Malaysia, Thailand, Indonesia and the Philippines as failures.

This was a little surprising for me, as someone who thinks of Malaysia and Indonesia as fairly successful countries. These two countries have had a good decade, but when you look at the GDP per capita figures, today and historically, you can see Studwell's point. At mid-20th century, the countries Studwell sees as failures were all at the same level as, or significantly richer than South Korea. South Korea is now a fully developed country, South-East Asia's champions are not.

Studwell's recipe for success is simple:
1. Solid Land Reform
2. Industrial policy disciplined by export performance
3. A financial system that supports both

Of course there's a lot more to it than just that. The book gets into it. The governments in question must be committed to their path, pragmatic, and focused on their long-term goals rather than short-term riches, for the public or their political cronies. Perhaps most importantly, a government that wants to develop needs to develop its own competing sources of expertise, and be willing to ignore, and outright lie to institutions like the IMF and the World Bank who want them to adopt policies that aren't helpful.

There was a lot I absolutely loved about this book. It's gleeful trashing of political orthodoxy, left, right, neoliberal and socialist was delightful. As somebody who knows a lot more about history than economics it was fun to be told that history is the more useful discipline for economic development. It was great to finally get some solid case studies on the uses and misuses of economic orthodoxy.

So much criticism of multi-lateral banks is based in vague left wing insistence that they are evil. Studwell has the receipts on multi-lateral stupidity, and lays them out forcefully and dispassionately. He makes a convincing argument that IMF and World Bank policies make sense for countries that have reached a certain level of development. After the 1997 financial crisis a range of countries were forced into a multi-lateral straitjacket of "Anglo-Saxon" economics. This was disastrous for South-East Asian countries, but it may have hit South Korea at exactly the right time. South Korea's industrial policies and Chaebol champions had served their purpose, and become too powerful. "Free Trade" orthodoxy applied to the already mostly developed South Korea at the turn of the century may have helped the country beat the stagnation that Japan's model fell into. Korea's economic performance in the seven years since this book has been published seems to support that thesis.

My only quibble is more a suspicion than a problem. Is the story Studwell tells too compelling? It all seems to hang together too perfectly. Are there things being left out that don't fit the story? seven years after publication, it seems more on point rather than less, which is no mean feat. I'd love to read a good solid critique of this book. My suspicion is that they are thin on the ground. Studwell may be too unorthodox in his approach for folks to know how to answer his critiques.

Whether the picture presented is entirely accurate or not, we need more books like this. The history of these developmental models is vitally important, and more interesting than you'd think. What's even more important is the willingness the author demonstrates to dismantle orthodox thinking. There aren't one or two or even three ways of looking at economic development. Human potential is limitless. We need more books that present alternative theories of development. Not more additions to heavy bookshelves full of support for the "Washington Consensus" or Marxist alternatives.
...more

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Nov 19, 2020 Samuel Miller rated it really liked it

Relatively short book with a simple thesis but backed by a ton of research (I counted 583 footnotes!) I think the title is a little misleading though--How Asia Works sounds unintimidating (even when you include: Success and Failure in the World's Most Dynamic Region), yet the book itself can be overwhelming with economic detail. Personally, I took econ a while ago and don't interact with these aspects of business/economics intimately, so sometimes either my eyes glazed over or I had to google co Relatively short book with a simple thesis but backed by a ton of research (I counted 583 footnotes!) I think the title is a little misleading though--How Asia Works sounds unintimidating (even when you include: Success and Failure in the World's Most Dynamic Region), yet the book itself can be overwhelming with economic detail. Personally, I took econ a while ago and don't interact with these aspects of business/economics intimately, so sometimes either my eyes glazed over or I had to google concepts to better understand.

Contrary to my initial interpretation, this book isn't about Asian culture and how businesses can leverage cultural understanding in Asia to flourish there. Instead, it's about how governments in certain Asian countries facilitated economic success in the last few decades while others failed to do so. Studwell's thesis about which policies create economic success isn't specific to Asia; he just happens to use these case studies because these are the countries he studies. Once again I feel that "How Asia Works" just isn't the right title for this book, but that's a minor gripe.

On the other hand, I really appreciated the clarity and consistency of this book's thesis. Basically, governments of developing economies should:
- Have citizens farm individual family plots to maximize crop yields per unit area of land since labor is initially in abundance, as opposed relying on less efficient, large collectives
- Employ protectionist policies to nurture domestic manufacturing, facilitate competition between firms, and perhaps most importantly force them to export their goods to develop their global competitiveness
- Control domestic financial institutions to direct incentives toward the development of the above two points while limiting foreign influence, rather than succumbing to the short-term desires of global free markets too early

Honestly that's about it.

P.S.
I found it a little strange that he mentions Vietnam near the beginning, making it sound like he's going to discuss it, but then chooses to omit it to "simplify the structure of the book." On the back of my copy it's even listed as one of the countries about which Studwell "distills extensive research," so if you're interested in Vietnam in particular you'll probably be disappointed (but it's still a good book). ...more

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Oct 31, 2019 Oren Mizrahi rated it really liked it

tl;dr: long, highly academic, disorganized, incredibly well-researched and interesting. it fundamentally changed my opinions about economics.

deceptively short at 225 pages, this book is a highly academic dissection of the history of asian economics: the successful and unsuccessful. studwell discusses the historical backdrop of post ww2 asia and discussed how different countries approached their economies for the better/worse. his thesis is that government involvement is critical for a 3 step pr ...more

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Oct 11, 2017 Venky rated it it was amazing

Shelves: economics

"How Asia Works..." ("The book") comes highly recommended, garnering rave reviews from the likes of Bill Gates etc. The book more than merely lives up to the hype generated. Joe Studwell is more of a surgeon than an economist/journalist as he diagnoses the stumbling blocks, flexes out stimulants and prescribes suggestions that constitute the preserve of a select breed of North and South East Asian nations. Although not a policy prescription in the strictest and narrowest interpretations of the t "How Asia Works..." ("The book") comes highly recommended, garnering rave reviews from the likes of Bill Gates etc. The book more than merely lives up to the hype generated. Joe Studwell is more of a surgeon than an economist/journalist as he diagnoses the stumbling blocks, flexes out stimulants and prescribes suggestions that constitute the preserve of a select breed of North and South East Asian nations. Although not a policy prescription in the strictest and narrowest interpretations of the term, the book is certainly an eye opener for policy mavens, 'the know-it-all' economist and the eager entrepreneur trying to embellish the prospects of a developing economy.

The title of Studwell’s book is however a compelling misnomer. The most appropriate and relevant substitute could have been “How North East Asia Works” or even, “How South East Asia refrains from working”, for the book is a revealing and powerful insight into the play of contradictions and a dichotomy of contrasts. As powerfully demonstrated by Studwell, since procuring their independence, the North East Asian states of China, Korea, Japan and Taiwan have transformed into global economic heavyweights, their South East Asian counterparts such as Thailand, Malaysia, Indonesia and the Philippines have found themselves trapped in a rut of misguided economic policies, myopic developmental visions and misplaced policy prescriptions. While the North East Asian countries scale one improbable developmental height after another, the South East Asian nations always seem to be teetering on the brink of an economic catastrophe perpetually lurking around an unseen corner.

For any country in its development stage (based on the empirical evidence that is the state of the East Asian economies identified in the book), Studwell emphasizes the need for three basic, quintessential and deliberate policies. These are:

• Household farming and land reforms such as targeted redistribution;
• Export oriented manufacturing with embedded strict disciplinary targets; and
• Closely controlled finance that supports both the agriculture and manufacturing sectors

Studwell argues that booms in output occurred under conditions where farming took on the visage of “large scale gardening” instead of enormous collectives which struggle to lend sustenance and yield. A classic case in point being Mao’s “Great Leap” and the disastrous famine which decimated millions of starving farmers in its devious wake. Hence according to Studwell, what occurred in China, Japan, Korea and Taiwan and did not materialize in Thailand, Malaysia, Indonesia and the Philippines was a “good land policy, centred on egalitarian household farming that set up the world’s most impressive post war development stories”
The second peculiar and divergent policy advocated by Studwell is one which is a nightmare for free market evangelists and neo-liberal economists. Instead of suggesting a full-fledged and massive financial and industrial deregulation, Studwell painstakingly demonstrates that an initially protectionist policy that grants subsidies to manufacturers, makes available finance at low or even negative interest rates, but (and this is a capital BUT) indispensable and incontrovertible export targets would lead to a rise in the manufacturing sector as was the stellar case with South Korea and the former General Park Chung Hee. Creating a regime of cheap loans, tax and tariff exemptions, and liberal subsidies, Park even encouraged the formation of cartels but with a strict and uncompromising mandate to achieve targeted exports. Inefficient chaebols were either culled or merged into more profitable ones or even bankrupted. In stark contrast, Malaysia after obtaining its liberation from colonial rule employed state entities to buy out various mining and plantation interests, but made no effort to shift to an export manufacturing strategy for domestic firms. Banking on equity Joint Ventures and foreign collaborations, whether in attempting to manufacture Malaysia’s first indigenous car “Proton” or trying to be an ambitious integrated steel manufacturer of repute, Malaysia succumbed to the lure of premature deregulation thereby attracting foreign investment but failing to achieve technological capability. The contrasting policies adopted by the two nations is chillingly captured by Studwell in the following paragraph:

“In Korea POSCO started production in 1973 with a 1 million tonne a year operation at Pohang, ramping up to 9 million tonnes of world class output by 1983, and involving an investment of US$20 billion at today’s prices. In Malaysia, Perwaja started out with 1.5 million tonnes of output and got stuck, both in volume and quality terms. With no export discipline, a succession of carpet-baggers filled their boots as the taxpayer shelled out the equivalent of US$ 6 - 8 billion in today’s money for the country to learn next to nothing”. If this isn’t Dickensian, then there are not many instances that actually could be!

The final pathway to joining the big league of the rich man’s club lies in financial support. Studwell deems it appropriate to “keep the financial system on a short leash for a considerable period of time and make it serve developmental purposes” rather than resorting to a premature deregulation which seeks out the immediately profitable avenues of investment. The Asian Financial Crisis of 1997 that lopped off the market capitalizations of companies, not to mention decapitating financial institutions in Indonesia, Thailand and Malaysia are desultory and dangerous testimonies to unchecked liberalization and deregulation. In contrast China follows a clearly delineated structure of finance whereby lending and borrowing parameters are rigidly fixed and not allowed to cross boundaries of indiscretion.

Concluding this fantastic book, Joe Studwell poignantly states "However I repeat what others concluded after the Second World War: that to turn away from such policies indicates that the world is acceptable to us as it is. Take a look at South Asia, the Middle East and Africa, and ask yourself if it is"

It definitely isn't! ...more

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Sep 20, 2020 Muna rated it it was amazing

For someone new to understanding how the economy of countries works, this book was such fulfilling read with little jargon but detailed explorations of different aspects of economy. The book shows the difference in policy taken by North-East Asian countries: South Korea, Japan, Taiwan, and in some sense China to that of South-East Asian countries Malaysia, Philippines, and Thailand for their economic growth. The book gives a synopsis of approaches taken by each government for three aspects of th ...more

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Jul 29, 2018 Sef rated it it was amazing

Was skeptical at first and thought this book is going to be all about gossips like it was in the Asian Godfathers. I was pleasantly surprised how well Joe was able to articulate such a broad topic and fit that into one book. Obviously, one can go much deeper into each country, etc. but given he had to fit everything in a few hundred pages, I neither find the book too short or too long. Having spent most of my life in Hong Kong and having visited many countries in Asia, the book gave me a new sen ...more

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Jun 18, 2020 Spugpow rated it it was amazing

This book answers huge questions that I didn’t even know to ask. How did Korea and Taiwan follow Japan’s example to go from dirt-poor, feudal states in the early 20th century to rich, industrialized countries today? Why haven’t Southeast Asian countries been able to do the same? And most importantly, what gears are turning in China to take it down the same path—or not, depending on whether it can overcome building internal frictions?

The development strategy that emerges from history is amazingl ...more

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Jul 19, 2020 Mayank rated it it was amazing

The book focuses on 3 items for development of a emerging country - (1) land reforms and small scale farming, (2) setting up manufacturing industries and protecting them subject to export discipline and (3) tightly regulated economy to lead capital into industries which export and which the state wants to flourish.

The author is bold as he challenges the free market medicine provided by US and IMF to developing countries and says that no country has become rich just out of free markets. In the ph ...more

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About Joe Studwell

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Asian Godfathers: Money and Power in Hong Kong and South East Asia

The China Dream: The Elusive Quest for the Last Great Untapped Market on Earth

How Asia Works Lib/E: Success and Failure in the World's Most Dynamic Region

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“The easiest way to run developmentally efficient finance continues to be through a banking system, because it is banks that can most easily be pointed by governments at the projects necessary to agricultural and industrial development. Most obviously, banks respond to central bank guidance. They can be controlled via rediscounting loans for exports and for industrial upgrading, with the system policed through requirements for export letters of credit from the ultimate borrowers. The simplicity and bluntness of this mechanism makes it highly effective. Bond markets, and particularly stock markets, are harder for policymakers to control. The main reason is that it is difficult to oversee the way in which funds from bond and stock issues are used. It is, tellingly, the capacity of bank-based systems for enforcing development policies that makes entrepreneurs in developing countries lobby so hard for bond, and especially stock, markets to be expanded. These markets are their means to escape government control. It is the job of governments to resist entrepreneurs’ lobbying until basic developmental objectives have been achieved. Equally, independent central banks are not appropriate to developing countries until considerable economic progress has been made.” — 1 likes

“What created the Canons, the Samsungs, the Acers and so on in Japan, Korea and Taiwan was the marriage of infant industry protection and market forces, involving (initially) subsidised exports and competition between manufacturers that vied for state support.” — 1 likes

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